Trump Moves To Enable Crypto In 401k
The cryptocurrency market has experienced another price spike this week as U.S. President Donald Trump has made a move toward allowing cryptocurrencies in Americans’ retirement savings accounts. Bitcoin broke past the USD 116,000 price for the first time since late July. Ethereum has also shown strong gains as the market begins to react to the news that digital assets could soon be part of the United States' USD 43 trillion retirement market.
Trump’s latest executive order directs U.S. regulators to review and potentially rewrite rules that currently discourage employers from including non traditional assets like cryptocurrencies, private equity, real estate and gold in 401(k) retirement accounts.
Opening The Flood Gates to 401k Investment
In the U.S. most workers don’t have traditional pensions with guaranteed payouts after retirement or superannuation like we do in Australia which are mandatory financial contributions employers make towards our retirement. Instead they have 401(k) plans which are employer sponsored investment accounts. Workers contribute a portion of their pay which is often matched in part by employers and the funds are typically invested in stocks, bonds and mutual funds in a similar way Australian superannuation funds operate.
Government rules have required these plans to focus on investments that are relatively easy to value, transparent and liquid. That meant assets like private equity or cryptocurrencies which can be volatile tend to carry higher fees and have fewer disclosure requirements and were generally excluded. Employers also avoided them for fear of legal liability i.e. Rug Pulls.
Trump’s order gives the Department of Labor 180 days to review and update these restrictions. If the changes go through this will open the door for more Americans to allocate part of their retirement savings to crypto. Something that has been the viewed of many as a “holy grail” for digital asset adoption.
Immediate Market Reaction
The market movements come from the sheer size of the potential capital inflow. Of the USD 43 trillion in total U.S. retirement savings with nearly USD 9 trillion is held in 401(k) plans alone. The entire cryptocurrency market cap currently sits under USD 4 trillion meaning even modest allocations from retirement accounts could dramatically boost demand.
“That’s a monster pool of capital,” said Galaxy Digital CEO Michael Novogratz in an interview with CNBC. “What we’re seeing is the aperture of being able to buy crypto being widened and widened, and more avenues bringing people into the tent. When it becomes commonplace, when you can do it at the place you’ve already been doing business with, like Fidelity or T. Rowe Price. You just pull more people into this ecosystem.”
Significant Policy Shift
This policy direction is a reversal from earlier government stances. In 2022, the Department of Labor urged retirement plan providers to exercise “extreme care” before adding crypto to investments, warning of risks like volatility and the lack of regulatory protections. That guidance cooled early momentum after Fidelity became the first major provider to offer Bitcoin in its 401(k) products.
During Trump’s first term, the administration encouraged more exposure to alternative assets like private equity, though legal concerns limited adoption. The Biden administration later rolled back those measures. Now, Trump’s new order puts it back on the table
This coincides with July’s signing of the GENIUS Act which is the first official U.S. law to regulate stablecoins which was stated by supporters as a foundation for making America the “crypto capital of the world.”
What are your thoughts on the possible future inclusion of cryptocurrencies in 401k? Is it a risk or a benefit. Let us know in the comments section below.
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